Circle Internet Financial, Boston’s leading startup working on cryptocurrency technologies, got a boost on Tuesday by partnering with BlackRock, the world’s largest asset manager.
New York-based BlackRock, which oversees $10 trillion in assets, will help develop new applications for Circle’s digital token called USDC that is already used to help speed trading among various cryptocurrencies, the companies said without offering specifics.
BlackRock, Fidelity, and several other investors also agreed to put $400 million in new cash into Circle, which is planning to go public later this year by merging with a special purpose acquisition company.
USDC is a so-called stablecoin, meaning that unlike other cryptocurrencies such as bitcoin each digital token is backed by $1 of ordinary US currency. While the value of bitcoin fluctuates wildly, the value of Circle’s USDC stablecoin remains fixed at $1, thanks to more than $50 billion of assets that the company has in escrow.
“This funding round will drive the next evolution of Circle’s growth,” Jeremy Allaire, cofounder and chief executive of Circle, said in a statement. “It’s particularly gratifying to add BlackRock as a strategic investor in the company. We look forward to developing our partnership.”
BlackRock manages nearly ever kind of asset in markets all over the world, so new applications for Circle’s USDC could involve facilitating transactions in everything from stocks and bonds to foreign exchange or commodities, Stanford business school professor Darrell Duffie, who has studied stablecoins, said.
The deal is also an indication that crypto financial technology is going mainstream, according to Boston venture capitalist and tech executive Dave Balter, the CEO at Flipside Crypto.
“BlackRock is no joke and their efforts to explore capital market applications signals institutional investor interest is continuing to climb,” Balter said.